Tuesday, September 21, 2010

9/21 Daily Commentary

Bought more stuff, compliments of the gah-gah'd listeners of Fed esoteric wisdom.  SP futures started to fall right after the oracular pronouncement, down to the SP futures 30-minute M/A.  There he goes again with that 30-minute M/A business!  Vat is it vith dis guy?  Anyway it tapped it then went to new highs on a 3-wave, then came all the way back down to the 30-minute M/A yet again.  The blue line is a line that I stare at several times a day.  When SP futures take this out and stay .5% below it on a 30-minute close then it's over.  I know, I know, I've said for over a week that I'm looking for this and I've held back my short exposure until it happens.  I just won't wait any more, so I increased exposure on the Fed frolic.  I'm now 27% SDS and 1% short DJ futures, having covered 1% on hitting the 30-minute M/A.
Anyway look at the blue line.  This is an hourly chart but it cut the interval from 92 to 45. Guess what, it comes out the same!  I fervently believe that I will see a 30-minute close .5% below this M/A in the near future and I'll short more then.

The BS giveth and the market taketh away.  The Fed stated it's mandate to produce and maintain inflation.  The problem is it is failing.  Inflation just will not peek it's head over Chinese goods, houses, and oil.  How frustrating for Ben, to be Mr. Fiat with a mandate but without the means.  I think Ben should fly to China and tell them to export some of their inflation over here, or at least raise the Manufacturer's Suggested Retail of the stuff from the factories they took while we were asleep.  After all, if was Ben's predecessors that put America to sleep, not Ben.  Why pin it on him? 
And oil, oh worthy oil.  We've already imbedded oil at $75 a barrel into our cost structure, which was reflected in the spirit of inflation past.  What about the spirit of inflation future?  Well, $75 a barrel slows down the world economy, so getting oil to get moving requires that Ben should fly to Saudia Arabia and tell those shieks that they need to allow oil to gradually levitate to $150 a barrel which is what all his economists are telling should be the next stop.  You know, those smart guys.  Alas, the world is slowing down and apart from designing soft drinks made with oil the demand is punk. 
We just got a housing report today that made is obvious that housing was coming back.  Starts up 10.5%!  Now that should get things perking, but why are prices still falling. Whispering to the man behind the curtain he told me that Americans are becoming apartment dwellers.  What an unintended consequence of 60 years of Mr. Fiats! 
Now, I can't blame the Fed chairmen alone.  Worthies the likes of Uncle Miltie Friedman, Lacker the Hacker, and Paul Maul Samuelson have raised generations of buffoons and the buffoonery wore off onto the lapels of Fed chairmen extinct.  I've read Greenspan's book and I have it right here and he says that it is not his fault, that circumstances demanded negative real interest rates half the time he was in there.  One thing after another, after another.  No wonder Volker hates him.  What a whiner!  He finally raised rates just before he handed the baton to Ben. Sucker!
We still have legions of people that listen to this crap and base investment decisions on what these people have to say!  OY VAY!
By the way the market went up to the 2007 trendline and stopped. Magic!


  1. God I love you!! Thanks for making me laugh today!


  2. Great post, Steve! Very funny. Very sad. Very true.

  3. Steve, what a lovely rant!
    I had mine a week ago.
    You Americans have my genuine admiration for what your country has achieved...despite the machinations of these idiots.
    I pray you can keep yourselves afloat, as the Russians & Chinese are just sat there waiting.

    Here is my post, and just doing a quick one before heading off to bed. I resisted the urge to add positions, until that trend break actually happens, tomorrow I hope.

    Best of luck.


  4. Brilliant post Steve! I was curious about why choose to start your trendline from the 2007 high vs. the 2006 high for instance?

  5. The end of the bull market occurred at 14,198 on 10/11/2007.